Market ready to put PBX in the telecoms museum

Industry moving towards IP telephony uptake, finds research

The traditional PBX is destined to end its days as a dusty museum relic as it gradually becomes eclipsed by IP telephony.

That was the view of key end-users, resellers and vendors when questioned recently by analyst firm Quocirca at the CRN Foundation event at this year's Comms Channel Expo.

"Eventually, IP telephony will prevail and the traditional PBX will be a museum piece," said Bob Tarzey, alliances services director at Quocirca.

"It isn't clear when or how the vendors will get there, or how users will end up in that position. But it is where the industry believes it is going."

However, Tarzey claimed that right now users need to be sold IP telephony.

They also need to have some reason to make a new investment in telephony systems. Resellers need to catch them at this decision-making stage. But even then, value-add resellers can expect to run into resistance.

Two of the main objections customers come up with are the cost and a combination of reliability and availability. Voice over IP (VoIP) can provide five-nines availability, but it comes at a high cost.

When replacing like for like, VoIP will cost more than PBX, Tarzey claimed. Surprisingly, he added that return on investment (ROI) is not a particularly important factor.

"It is not end-users' key driver. If you go out and sell the total value proposition, rather than just the bottom-line cost, you can sell telephony solutions successfully.

"The proposition needs to offer future-proofing, leveraging of the infrastructure you are going to put in, and a lowering of management costs," he said.

SMEs are potentially an easier sell, Tarzey added. Big companies have separate IT and telecoms managers, whereas a small business is more likely to have one person who manages both voice and data services.

There is a further complication in the form of two separate and distinct reseller cultures. Pure voice resellers have been around for many years, are very service-oriented and very used to demonstrating the ROI a PBX provides, relying on service revenues thereafter.

Data resellers have only been around for 20 years or so and tend to be less service-oriented and more dependent on sales margins and rapid life-cycle products. Each type needs to understand the other's market.

But in reality, VoIP is happening. Organisations from all industries and of all sizes are investing in IP telephony and many systems are genuinely mission-critical. Tarzey cited a healthcare trust which has implemented converged solutions as an example.

"But the installed base is small and the growth potential is strong," he said.

Quocirca is going to the market regularly to look at research projects across Europe, and the analyst recently interviewed 190 organisations of all sizes.

Significant usage of IP telephony was found to be very low. Some firms said they were piloting projects, but more than half of the respondents to the survey said they had no plans or did not know what their plans were with regard to IP telephony.